Friday, January 22, 2010

More dollars than sense

The great cliche: Millionaire wants to own an amazing winery. Pours tens of millions of dollars of own personal fortune into winery project with no wine business experience. Wants to charge too much for their wine out of ego. Finds out that even at that price, it still loses money, and wants prices raised. National Sales managers come and go, all getting killed for being the messenger. Why does this keep happening? Why do you rich folk have such egos, and if you're so smart, why are you soooo bad at the wine business? Tired of lighting your cigars with $100 bills? Here are some handy tips if your REALLY think you want to start your own winery:

Check your ego at the door. There are too many egos to be dealt with throughout the entire chain of getting your overpriced wine onto someone's table (see: chef's, buyers, sales managers and snooty consumers).

Find good wine business people and ask smart questions, Like "Can this be profitable?" & "How much will a 5 star hospitality center on prime real estate affect the price of the wine." The chances are, you will lose some money, but hey, it's a tax write-off

Spend your down time working a harvest or 10. You will be very surprised at how much work and skill is actually involved in the production of wine.

Understand what makes great wine great. Writing a big check doesn't automatically mean you'll have great wine, this is not a new concept!

Spend a lot of time learning about how wine gets from your hands to the consumers'. A big score isn't enough, it will take a lot of work by a lot of underpaid, overworked salespeople across the country.

You made your money in some sort of business, probably a ruthless business. This isn't that business. This is a business built on relationships, trust, humility, enthusiasm and sincerity. These qualities are not what comes to mind when I think about how people get REALLY REALLY stinkin' rich like you.

So let's say I can't talk you out of it, and you REALLY want to make wine. Fine, but here's the deal, you're going to do one of a few things:

Let someone else run it for you, trust that person. And understand, you're probably going to lose a lot more money than you expected

Get really dirty. You should probably drop everything and start immersing yourself in everything from the ground up. And all of this needs to be handles with patience and great humility.

Spend your money on building a great cellar and traveling the world, this is the ultimate wine lifestyle. Leave the wine business to the professionals, we'll call you if we need a leveraged buyout, Gordon Gecko.